GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 6 to 10 cents lower.
Wheat: Winter wheat 1 to 3 cents higher; spring wheat narrowly mixed.
GENERAL COMMENTS: Corn and soybean futures failed to find sustained buyer interest overnight and faded to losses late in the session. We expect profit-taking and corrective selling following recent strong gains to weigh on those markets at the start of daytime trade. Wheat futures finished mixed overnight, though they could be pulled lower if corn and soybeans extend their late overnight declines. Outside markets are price-supportive, with crude oil futures more than $1 higher and the U.S. dollar index nearly 600 points lower.
World Weather Inc. says today’s European weather model is wetter for Argentina next week with nearly all of the country expected to receive rain at one time or another. The American model isn’t quite as wet, especially in northern areas. But both models signal improved rainfall for Argentina next week. Brazil’s weather will remain mixed, with rains through central areas continuing, while Rio Grande do Sul will see erratic and light rainfall.
India’s soymeal exports could more than double in 2022-23, as drought in top exporter Argentina lifted global prices, prompting buyers to seek cheaper rates, four industry officials told Reuters. Indian mills have contracted to export around 160,000 MT of soymeal for January shipment and another 100,000 MT for February, mostly to Asian countries such as Vietnam, Bangladesh, Japan and Nepal, the officials said. India’s soymeal exports in the first three months of 2022-23, which started on Oct. 1, jumped 223% to 325,409 MT, according to trade body Solvent Extractors’ Association of India. An official at an oilseed processor estimated India’s soymeal exports could rise to 1.5 to 2 MMT in 2022-23, from 644,000 MT a year ago.
World Weather says U.S. HRW areas will get some precipitation over the next 10 days, but drought-busting moisture is not likely. A storm is impacting Nebraska, northern and eastern Kansas and northeastern Colorado today with snow and some rain. A second storm is expected this weekend across the Central Plains, but it will be a weaker event with limited increases in soil moisture expected. A third event is possible during the middle of next week, though World Weather says the American model run this morning removed that event.
CORN: March corn futures failed to find sustained buying above Tuesday’s high at $6.87 in the overnight session. The overnight high at $6.88 3/4 is near-term resistance, followed by the psychological $7.00 mark. The 200-day moving average at $6.78 is near-term support, followed by the 5-day average at $6.74 1/4.
SOYBEANS: March soybean futures failed to find sustained buying above Tuesday’s high at $15.41 during overnight trade. The overnight high at $15.48 1/2 is near-term resistance. The contract high is at $15.72 1/4. Near-term support is at the December high of $15.37 1/2 and the 5-day moving average at $15.23 1/2.
WHEAT: March SRW wheat futures found support at the 5-day moving average around $7.46 1/2 overnight and poked above initial resistance at $7.58. The overnight high at $7.60 1/4 is initial resistance. The 5-day moving average is initial support, with backing from the 10-day average just under $7.44.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a weaker tone after a technical breakdown on Tuesday. Unless Tuesday’s lows are violated, however, it wouldn’t surprise us to see corrective buying surface amid ideas the downside was overdone. But any buyer interest is likely to be limited as traders wait on direction from the cash market. Cash sources changed their tone a little after Tuesday’s disappointing performance by live cattle futures. They expect packers to be even more passive in cash cattle negotiations in hopes of getting feedlots to sell cattle at lower prices again this week. Active followthrough selling in futures could further swing cash negotiations in packers’ favor. Near-term support for April live cattle futures is at Tuesday’s low at $159.45. Old support at $160.425 is initial resistance.
HOGS: February lean hog futures could face pressure from the continued drop in the cash index. The CME lean hog index is down another 16 cents to $74.18 (as of Jan. 16) and now $2.60 below year-ago at this time when it was nearly $6.75 off its seasonal low. But strong corrective gains in deferred futures on Tuesday suggested traders sense a seasonal low in the cash market is near, which could trigger followthrough buying today. Tuesday’s low at $85.95 is near-term support for April lean hog futures. Old support at the November/December double-bottom at $89.10 is key resistance.
China imported 200,000 MT of pork in December, up 20,000 MT (11.1%) from November and 20.1% greater than last year. That was the largest monthly pork import total since November 2021. For 2022, China imported 1.76 MMT of pork, down 52.6% from the previous year.
China’s sow herd at the end of 2022 was slightly higher than a reasonable level at nearly 44 million head. The country’s ag ministry encouraged farmers to reduce their sow herds.